The Department of Energy’s loan program has helped Tesla; now he must help low income communities

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While most people have heard of Tesla, far fewer have heard of the United States Department of Energy Loan Programs Office, a $ 40 billion fund within the DOE that helped finance one of the first auto factories. of Tesla and start the business.

The DOE loan fund has an important, but limited scope to help private sector companies with innovative initiatives. And while this is important, its scope needs to be broadened so that it can support the energy transition for a much larger number of Americans, including the widespread adoption of proven technologies, especially in low-income communities and moderate and underserved.

Household energy consumption is one of the main contributors to climate change. If we as a nation are to reduce greenhouse gas emissions, we need to improve the efficiency of our buildings by adding insulation, replacing old bulbs with LEDs, installing heating systems. and efficient cooling and switching to renewable energy sources. But for many, access to these improvements is out of reach despite greater energy security for individuals and their communities.

One of the pillars of Secretary Granholm’s program at the Department of Energy is environmental justice and targeted investment in disproportionately affected, low and moderate income and underserved communities. Congress should authorize the DOE to broaden the definition of innovation and move beyond technological definitions to propose innovations in deployment and financing approaches that provide better access to the benefits of proven energy technology. clean for under-represented and low-income communities. In energy terms, this means community solar, rooftop solar + storage, or even virtual power plants. It could also mean decommissioning dirty and expensive ‘peak’ power plants that are often found in poorer neighborhoods, reducing the costs and complexity of safely maintaining the power grid and creating greater resilience for our people. communities.

For example. By expanding the DOE’s authority today for the Loan Programs Office, Congress could effect changes tomorrow, enabling families struggling to make repairs and / or build resilience in homes and infrastructure destroyed or damaged by Hurricane Ida to provide loan funds to help them get started.

Or communities could start deploying solar storage and batteries to reduce or eliminate reliance on the grid in the event of a power outage – as we’ve seen in the West with wildfires and elsewhere with flooding and damage caused. by the wind.

Lives are lost in the event of a power failure, but we have the solutions that can prevent it. The DOE loan guarantee program must be mobilized to meet these urgent needs.

DOE has over $ 40 billion in loan authorization and loan guarantees that could be used for energy investments in all markets, including projects that benefit underserved communities and customers. We believe the program should be amended by Congress to include loans and guarantees on proven technologies such as solar power, electrification of household appliances and heat pumps to low-income and disadvantaged communities, which are currently excluded. All Americans, but especially low- and moderate-income Americans, would benefit from the savings associated with these measures.

While these technologies are not new, business models and funding approaches are “innovation” that needs to be sustained – Congress needs to broaden the definition of “innovation” when it comes to low income communities. Unlocking this essential resource would save low-income Americans money, fight climate change, help America’s energy transition, create jobs, while making our communities most vulnerable more resilient. This is a win-win solution, as changing program guidelines would allow DOE to make low-risk, high-volume investments that would benefit more Americans.

There is no doubt that the social housing sector is underserved in terms of energy efficiency and renewable investments. Current rebate programs, tax incentives and low-interest loans are often not designed to accommodate the financial situation of low-income homeowners and those in disadvantaged communities. By redirecting DOE loan funds towards the development of innovative programs to support renovations for low-income people, reduce barriers to access, and break funding silos, the program could have a significant impact on emissions from greenhouse gases while creating real economic opportunities in the energy transition markets.

Mark Wolfe is an income inequality economist and director of the National Energy Assistance Directors Association.

Kerry O’Neill is the CEO of Inclusive prosperity capital, a national non-profit lender that provides clean energy finance for low- and moderate-income housing and other underserved markets.


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